Air Liquide has put pen to paper in a new long-term €40m contract with Russia’s key steel producer, Severstal. According to commentators, the investment completes Air Liquide’s geographical coverage of the Volga district.

Within the agreement, Air Liquide will supply oxygen, nitrogen and argon to Severstal’s new steel plant in the Volga Federal District, Saratov. Facilitating these provisions, Air Liquide will invest, build and operate a new Air Separation Unit (ASU) offering an oxygen capacity in excess of 300 tonnes per day. The plant, located in Balakovo, is scheduled to begin production at the end of 2012.

But it is not just Severstal to reap from Air Liquide’s latest investment. The new ASU will also serve the liquid oxygen, liquid nitrogen and liquid argon needs of other industrial customers in the Saratov and Samara locale .

Indeed, Pavel Ipatov, Governor of Saratov expressed the regional attitude towards this €40m deal, “We are delighted to welcome Air Liquide to our region, a company with long-term strategic development plans in Russia. I am convinced that the new plant in the Saratov region will be a reliable partner for local industrial enterprises. Moreover, I would like to highlight that this plant is being built in accordance with strict safety, energy efficiency and environmental requirements.”

Guy Salzgeber, Vice President of North and Central Europe and member of the Air Liquide Group Executive Committee, detailed the relevance of such investments for his firm. In an official statement he remarked, “ We are pleased to see this new expansion of our partnership with Severstal after the success of our joint-venture in Cherepovets. Furthermore, this new ASU will enable Air Liquide to complete its geographical coverage of the Volga district for the supply of liquid gases to industrial customers, after investments already announced in Elabuga (Tatarstan) and Kstovo (Nizhny Novogorod).$quot;

Salzgeber added, $quot;This new contract is symbolic of our continuous development in this high growth region. Developing economies are one of the growth drivers of the Air Liquide Group.”

The recipient firm, Severstal was also pleased with the outcome. Alexander Grubman, CEO of Severstal Russian Steel Division, remarked, “The construction of this Air Separation Unit is the second mutual project of Severstal and Air Liquide. The signature of this new contract with Air Liquide is an important step in the development of our partnership based on the respect of both sides' interests.”